Identify a True Statement About Balance of Payments

question 17

Multiple Choice

Identify a true statement about balance of payments.

• A)Balance of payments includes foreign borrowing and lending.
• B)Balance of payments surplus indicates more money flowing out than in.
• C)Balance of payments excludes overseas investments.
• D)Balance of payments deficit indicates more money flowing in than out.

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, assuming other factors remain constant.

Wage Rate

The standard amount of compensation that employees receive in exchange for performing a specific task or job per time period.

Substitution Effect

The adjustment in purchasing behaviors as a result of variations in the comparative costs of products, prompting buyers to switch from one item to another that is either cheaper or more costly.

Output Effect

The impact on economic output and productivity resulting from a change in the level of economic activity.